How Trade Agreements Stand in the Way of an International Green New Deal

To reduce emissions abroad, the U.S. must renegotiate its trade agreements.

Basav Sen April 22, 2019

(Illustration by Ryan Johnson)

The Unit­ed States is the only coun­try with­draw­ing from the world­wide Paris cli­mate agree­ment. U.S. lib­er­als typ­i­cal­ly argue that we must rejoin, and I have no dis­pute with this. But lib­er­al rhetoric often leaves the false impres­sion that the Paris agree­ment rep­re­sents a gold stan­dard, attrib­ut­able to U.S. lead­er­ship” under Pres­i­dent Barack Oba­ma. Actu­al­ly, the agree­ment is just one small step — and its weak­ness­es are sub­stan­tive­ly attrib­ut­able to the nego­ti­at­ing posi­tion of the Unit­ed States.

25 percent of global greenhouse gas emissions from 1870 to 2017 came from the United States.

Sci­en­tif­ic mod­el­ing shows the emis­sions reduc­tions pledged in the agree­ment would result in a glob­al tem­per­a­ture rise of 3 degrees Cel­sius above pre-indus­tri­al lev­els, well beyond the 1.5 degree increase that the Inter­gov­ern­men­tal Pan­el on Cli­mate Change esti­mates as the ceil­ing to avert some of the worst effects.

Worse, pledges under the Paris agree­ment are whol­ly vol­un­tary — in large part due to U.S. pres­sure. The char­i­ta­ble main­stream media inter­pre­ta­tion is that this maneu­ver enabled the Oba­ma admin­is­tra­tion to join the agree­ment with­out rat­i­fi­ca­tion by the Repub­li­can-held Sen­ate, as bind­ing treaties require Sen­ate approval. But it is also like­ly the Oba­ma admin­is­tra­tion was seek­ing to main­tain the Unit­ed States’ posi­tion as the world’s largest pro­duc­er of oil and nat­ur­al gas, a posi­tion in direct con­flict with any ambi­tious cli­mate com­mit­ment. U.S. crude oil exports increased more than 2,600 per­cent between 2010 and 2017, and we’re now a net exporter of nat­ur­al gas. The Oba­ma administration’s Nation­al Secu­ri­ty Strat­e­gy doc­u­ment treat­ed these exports as a nation­al secu­ri­ty imper­a­tive, need­ed to ensure the ener­gy secu­ri­ty of allies and help build new mar­kets for U.S. tech­nol­o­gy and investment.”

We must now chart an entire­ly new path on inter­na­tion­al cli­mate pol­i­cy, which starts with rec­og­niz­ing the out­size role of the Unit­ed States in the cri­sis. Our country’s dis­pro­por­tion­ate wealth is relat­ed to our long his­to­ry of indus­tri­al­iza­tion and high ener­gy con­sump­tion, often at the expense of the rest of the world. The Unit­ed States is respon­si­ble for 25 per­cent of glob­al cumu­la­tive emis­sions from 1870 to 2007, more than the 28 coun­tries of the Euro­pean Union com­bined. On a per capi­ta basis, our cur­rent emis­sions rank near the top (behind a hand­ful of small, fos­sil fuel-rich coun­tries such as Bahrain and Qatar), more than twice those of Chi­na and 50 times those of Gambia.

By anoth­er met­ric, things are even worse. Most meth­ods of track­ing emis­sions are based on where goods are pro­duced, even if they are pro­duced for export. But there’s an argu­ment that the respon­si­bil­i­ty for pro­duc­tion emis­sions lies with the con­sumers of those goods, who dri­ve the demand. The Unit­ed States is the world’s third-largest importer of con­sumer goods, effec­tive­ly out­sourc­ing our emis­sions to poor­er countries.

Our cur­rent com­mit­ment to cli­mate action does not reflect this out­size respon­si­bil­i­ty. Cli­mate Action Track­er, which cal­cu­lates what a fair con­tri­bu­tion toward meet­ing the Paris goals would be for each coun­try (based on his­toric respon­si­bil­i­ty and present eco­nom­ic resilience), rat­ed the U.S. emis­sions reduc­tion pledge under Oba­ma as insuf­fi­cient.” Under Pres­i­dent Don­ald Trump, U.S. cli­mate pol­i­cy is rat­ed crit­i­cal­ly insuf­fi­cient,” con­sis­tent with a dis­as­trous warm­ing of 4 degrees Cel­sius or more.

As a coun­try that’s done a dis­pro­por­tion­ate share of the dam­age, we must take a dis­pro­por­tion­ate share of respon­si­bil­i­ty to set things right. We must rapid­ly elim­i­nate our own emis­sions and put an end to the extrac­tion of fos­sil fuels for export, but this isn’t enough. Because 85 per­cent of glob­al emis­sions now come from out­side the Unit­ed States, the Unit­ed States must play a major role in help­ing oth­er coun­tries through aid, tech­nol­o­gy shar­ing and trade reform.

Esti­mates of how much the world needs to spend annu­al­ly to mit­i­gate cli­mate change range as high as $2.4 tril­lion. The Unit­ed States, respon­si­ble for a quar­ter of both his­tor­i­cal emis­sions and present glob­al GDP, should arguably cov­er hun­dreds of bil­lions of this cost. Yet the U.S. gov­ern­ment spent only $13.2 bil­lion in cli­mate change fund­ing in 2017, com­bin­ing domes­tic spend­ing and for­eign aid. The pledged U.S. con­tri­bu­tion to the Green Cli­mate Fund, a mul­ti­lat­er­al financ­ing mech­a­nism for cli­mate mit­i­ga­tion and adap­ta­tion in the Glob­al South, is only $3 bil­lion (and only a third has been deliv­ered, the remain­der sus­pend­ed by the Trump administration).

To cre­ate a pow­er­ful polit­i­cal nar­ra­tive in sup­port of fair U.S. con­tri­bu­tions, it’s crit­i­cal to frame them as com­pen­sa­tion, not char­i­ty — in effect, a form of repa­ra­tions. Some of this com­pen­sa­tion must also take the form of tech­nol­o­gy. Much of renew­able ener­gy tech, how­ev­er, is patent­ed by pri­vate com­pa­nies — from Tes­la to IBM — pro­tect­ed under intel­lec­tu­al prop­er­ty pro­vi­sions in free trade agree­ments that allow them to charge high­er prices and licens­ing fees.

But pri­vate intel­lec­tu­al prop­er­ty claims ulti­mate­ly rely on pub­licly pro­duced knowl­edge, and there is no jus­ti­fi­ca­tion for let­ting them get in the way of cli­mate action abroad. For exam­ple, research fund­ed through gov­ern­ment pro­grams, such as the Advanced Research Projects Agency-Ener­gy (ARPA‑E), has been a major dri­ver of the falling costs of renew­ables, because open-end­ed, ear­ly-stage research is often not prof­itable enough to attract pri­vate sec­tor funding.

Anoth­er obsta­cle posed by neolib­er­al free trade and invest­ment agree­ments is investor-state dis­pute set­tle­ment (ISDS) pro­vi­sions, which sub­ject a country’s domes­tic reg­u­la­tions (includ­ing envi­ron­men­tal pro­tec­tions) to legal chal­lenges by cor­po­ra­tions. Dis­putes are heard by unelect­ed pan­els of trade experts” whose deci­sions are final. In effect, cor­po­ra­tions can block gov­ern­men­tal cli­mate action that inter­feres with trade. After Cana­da issued a mora­to­ri­um on frack­ing in the St. Lawrence basin, for exam­ple, U.S. oil and gas com­pa­ny Lone Pine Resources sued Cana­da under NAF­TA; the case is ongo­ing. The Unit­ed Nations ISDS case data­base shows that 74 of 972 ISDS cas­es have been filed by fos­sil fuel extrac­tion com­pa­nies (about 7.6 per­cent), and anoth­er 173 by util­i­ties, which include fos­sil fuel pow­er and dis­tri­b­u­tion com­pa­nies (though also many renew­able ener­gy companies).

Agribusi­ness, tim­ber, met­als min­ing and oth­er indus­tries also use ISDS to block reg­u­la­tion, and are rapid­ly encroach­ing on the world’s forests — cru­cial car­bon sinks. After the Tan­zan­ian gov­ern­ment can­celed Swedish Agro EcoEnergy’s ethanol project in 2016 out of con­cern for for­est wildlife, for exam­ple, the com­pa­ny sued Tanzania.

The impact of ISDS goes be-yond indi­vid­ual cas­es to a chill­ing effect on any new reg­u­la­tion. Chevron acknowl­edged in meet­ings with EU offi­cials that it lob­bied for ISDS pro­vi­sions as a deter­rent” on envi­ron­men­tal reg­u­la­tion. In 2010, for instance, the Guatemalan gov­ern­ment reversed a deci­sion to close an envi­ron­men­tal­ly destruc­tive gold mine, fear­ing an ISDS law­suit. The U.S. gov­ern­ment should take action to reopen nego­ti­a­tions on these treaties, putting an end to ISDS.

In short, it is time for a com­plete reset in U.S. glob­al cli­mate pol­i­cy. Instead of seek­ing lead­er­ship” in cli­mate nego­ti­a­tions, we should take respon­si­bil­i­ty for the his­toric harm we have inflict­ed and com­mit to our fair share — a dis­pro­por­tion­ate­ly large share — of cli­mate mit­i­ga­tion at home and finan­cial assis­tance for the Glob­al South. Simul­ta­ne­ous­ly, we must aban­don harm­ful nation­al secu­ri­ty and free-trade dog­mas that detract from cli­mate action by ele­vat­ing cor­po­rate prof­it over peo­ple and planet.

That’s noth­ing short of a 180-degree turn from the ide­ol­o­gy of Amer­i­can exceptionalism.

Basav Sen is the cli­mate jus­tice project direc­tor at the Insti­tute for Pol­i­cy Stud­ies (IPS) and writes on the inter­sec­tions of cli­mate change and social and eco­nom­ic jus­tice. Pri­or to join­ing IPS, Basav worked for 11 years as a cam­paign researcher for the Unit­ed Food and Com­mer­cial Workers.
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